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The Rising Price of Milk
Two weeks ago, Tesco was widely praised in the media for announcing two initiatives: To increase the price UK dairy farmers receive for milk, while not raising the price of standard milk to consumers; and to introduce a higher priced “localchoice” milk from smaller local producers.
But yesterday’s Guardian attributed the surprise rise in UK inflation, at least in part, to the rising price of milk.
Have consumers already swallowed the price rise that will pay for desperately needed higher returns to farmers, while the supermarkets take all the credit?
And Tesco’s PR department must be delighted with all the publicity for something that other supermarkets are already doing. ASDA, Sainsbury’s, M&S and Waitrose already have direct or close relationships with farmers supplying their milk, while the East of England Co-op is just one example of a retailer selling milk from specific local farms at reasonable prices.
So what is the price of milk?
Tesco’s own on-line price check reports that the main supermarkets (Tesco and its rivals Sainsbury’s, ASDA and Morrisons) are all charging exactly the same for standard, own-label milk. This is unsurprising as milk is a classic known value item, one the few things we all know the price of and judge supermarket prices by.
[Quoted prices all for April 2007] The supermarkets are charging 35p for a pint, 66p for 2 pints, £1.15 for 4 pints and £1.68 for 6 pints, equivalent to between 62p and 49p a litre, of which Tesco has announced it will increase the price paid to farmers to 22p a litre (the Milk Development Council urges caution at comparing this price with existing prices, as the exact pricing structure is still unclear). These prices have crept up recently: Tesco quietly put prices up from 33p a pint in March, while ASDA was charging 32p a pint a year ago.
Tesco charges as much as 80p a litre in some of its shops. My local One Stop (owned by Tesco) is charging a massive 40p for half a litre (in a bottle that looks like a pint but is significantly smaller) while the local Co-op charges just 67p for 2 pints of milk from local farms (the East of England Co-op’s Exclusively East Anglian milk).
Tesco’s announcements come rather late for UK farmers from the retailer responsible for 27% of all the milk sold in the UK. But the news should be welcomed and will certainly benefit around 1000 farmers. Let’s just not let the hype obscure the availability of good, locally sourced and fairly priced milk elsewhere. The East of England Co-op’s milk is an excellent example of true provenance – their website provides a list of the farms producing it.
Trace your milk
It’s rare to be able to trace your milk back to the farm, but you can easily find out the dairy that’s produced it. Just find the EU identification code on the packaging (it may be in an oval or printed next to the use by date) and look it up on this list of UK dairy processors.
7 Comments
I bumped into an old school friend recently – someone I haven’t seen in getting on for 20 years. His family owned a mid-sized dairy herd – note the past tense.
After a few years of running the farm himself, my old pal had to get out of it – he just couldn’t make it pay. It struck me as very sad indeed.
He’s now selling feed to farmers – and that means having to travel further and further afield as other dairy farmers give up the ghost.
I wonder how many consumers know that of the 49p-80p a litre they are paying, significantly less than half goes to the farmer.
Do you know what the average cost of production is?
Richard – It’s an all too familiar story. According to the NFU, it costs the average farmer 21p to produce a litre of milk, for which they’re paid an average of 17.3p. 10 years ago, farmers were receiving around 25p per litre. As the farm price has dropped, the retailers’ margin has massively increased. Its a desperately unsustainable situation and dairy farmers are going out of business fast.
So what can we do about it? It’s surely impractical to say we should buy milk from somewhere other than the supermarket?
While it seems great that a British business is making £2.55billion profit, this is surely unsustainable when they do this by putting their suppliers out of business – or are we to assume that Tesco et al are happy to see us having only imported milk on the shelves?
To push the buying price up to 22p a litre doesn’t really help the farmer – it leaves him in a very risky business situation.
Richard – A lot depends on what’s available locally. Where I live, I’m lucky to be able to buy truly locally sourced milk from the local Co-op. And, were I to go to the nearest Morrisons, I’d be able to buy local milk from another, farmer-owned dairy. And this is in East Anglia, hardly a major dairying area. I think the main thing is to look and what’s available and demand more information – where our milk comes from, the terms and price for the farmer etc. At least things seem to be improving. The Tesco announcement does mark an improvement and other supermarkets have already improved their milk sourcing.
You could stop drinking milk! – Cows milk IS a detrimental food for human animals. Its design is for the growth of calves.
The mis information given to the public about milk is the biggest conspiracy going!
Paturised milk leeches calcium from our bones.
Milk is NOT a good or viable food for human animals.
Think outside the conceptualised box of indoctrinated misinformation and source protein from viable sources suitable for the human animal.
And no I am not a emotive vegan.
Just scientific medical sense.
Do our doctors know this. YES they do.
Do the dairy industry know this YES they do.
Do we know it. No – we are the indoctrinated ones, programmed to drink this liquid – costing the public high in maintenance.
Why do our farmers need subsidising, cause they are not growing what works.
Do I feel concerned for the farmers. No if you dont grow what works you dont get paid.
Its not up to the government or the british public to give subsidy to an industry that is insisting on staying with the conceptual restraint of failure.
I’d be interested to read the science behind your claim that pasturised milk leeches calcium from our bones – is there a website you can point us to that substantiates this claim?
I’m from Romania,
If you think that’s bad, do know that here a Liter of milk is on average about 65 pence and that the farmer only gets about 10-12 pence for a liter of milk. That’s surely outrageous and i hope they do something about it.
Also, a Romanian-breed cow , i don’t know the Latin exact name, so here’s a picture, http://www.ansi.okstate.edu/breeds/cattle/baltataromaneasca/images/baltanaromaneasca-web-1.jpg
sells for less than 500 pounds, sometimes for as little as 200-250 GBP (i’m talking about an adult , healthy , 3-5 year old cow !!!!! :O )